This direct marketing plan aims to increase sales of Fitbit's trackers, especially the Fitbit Charge, through a campaign targeting women ages 25-40. The campaign will use emails, direct mail, social media, and retargeting with ads offering a 5% discount. It is estimated to generate over 2000 orders over 10 months at a nominal budget. Fitbit has a leading market share in the fitness tracker industry but faces competition from Apple, Garmin, Jawbone and others. The campaign targets a health-conscious demographic based on statistics showing many women aim to lose weight and stay fit as New Year's resolutions.

1. Direct Marketing Plan
MKT 321
Direct and Database Marketing
Professor: Marc Hsu
Team Members:
Hsuan-Wen Huang (Sharon)
Pallavi Singla
Tomasz Borys
Zinah Al-Hilali
Zhi Zhang (Ricky)

2. 2
Tableof Content
A. Executive Summary & Introduction ---------------------------------------------------------------- 3
B. Situation Analysis --------------------------------------------------------------------------------------- 4
 Marketplace macro-environment
 Competitive situation
 Target group analysis
 Distribution channels
 Current product situation
C. Opportunity and Issues Analysis -------------------------------------------------------------------- 9
 SWOT
D. Goals & Objectives ------------------------------------------------------------------------------------ 11
E. Marketing Strategy ----------------------------------------------------------------------------------- 11
F. Direct Marketing Tactics ---------------------------------------------------------------------------- 12
 Channels & key tactics
 Total budget & CPA
 Key assets &support tools
G. Database Development ------------------------------------------------------------------------------ 24
H. Implementation Timetable of the Program ----------------------------------------------------- 25
I. Budgets and Financial Information ---------------------------------------------------------------- 26
J. Evaluation Rules and Methods --------------------------------------------------------------------- 28
K. References ---------------------------------------------------------------------------------------------- 29

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A. Executive Summary & Introduction
 Introduction
Company background: Fitbit was introduced in 2008 by Eric Friedman and James Park
in San Francisco. It manufactures and provides wearable fitness-tracking devices
worldwide. Fitbit is a tracker of physical activities, it was designed to help people
become more active exercising, eat a healthier diet, and sleep better. Ultimately, it is
dedicated to help user lead a healthier lifestyle.
Product introduction: Fitbit produces both wristbands and portable clippable devices that
monitor users’ fitness activity by tracking the calories burned or distance moved. Its main
products include Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, Fitbit ChargeHR, Fitbit
Surge, and some other devices and accessories related to fitness. Fitbit Zip is a wireless
tracker that allows the user to track data of daily activity (steps, distance, calories, active
time). Fitbit One is a clippable wireless tracker, which enables the user to track steps and
sleep. Fitbit Flex, Fitbit Charge and Charge HR are wristband trackers, which offer
similar monitor function as other Fitbit devices. Fitbit Surge adds GPS and heart rate
tracking function.
Partnerships: Fitbit builds its strategic partnerships with health care organizations, such as
United Healthcare and Virgin Health miles.
 Executive Summary
Ftibit Inc. is one of the leading companies in the fitness trackers industry. Wearable
fitness trackers are gaining popularity and people are more interested in wearing them.
Especially people who are health conscious and like to measure their activity level.
Fitness trackers industry is expanding and many companies are offering similar products
to what Fitbit offers.
This direct marketing campaign aims to increase the sales of Fitbit’s trackers as well as
increasing the foot traffic to Fitbit.com. According to a Nielsen study, 54% of women
own fitness bands and 40% of them are between the ages of 25-40 years old. Therefore,
this would be a great target market. The campaign will use direct mail and digital
advertisements to target this segment. This direct marketing campaign will focus on
increasing the sales of one of Fitbit’s trackers: Fitbit Charge. Overall the campaign

4. 4
provides 5% discount on every purchase and the purchases happen only through
Fitbit.com.
The channels used include, emails, direct mails, contextual advertising, lookalike
advertising, facebook and twitter as the social media channels and retargeting etc. The
overall campaign comes out to be profitable except the social media channel Twitter.
Twitter, hence is not included in any of the results and will be kept only for testing
purposes. This campaign which runs for approximately 10 months will attract more than
2000 orders as per current estimation at a very nominal budget. If given a chance this
campaign will be extrapolated at a much higher budget to yield much better results.
B. Situation Analysis
 Marketplace macro-environment
Consumer lifestyle has shifted to technology in recent years. Wearable electronic is a
trend now in the portable consumer electronic industry. According to Euromonitor
International (2014), wearable electronic devices will become a mainstream in the future.
The sales volume of passive wearable device, the device which has to connect with apps
to track all data, is increasing from almost 0 in 2012 to almost 60 million in 2015, and it
expects to grow to more than 120 million in sales volume in 2017. It means that even
though Fitbit Inc. has been increasing its business revenue since 2 years ago. it is still the
right timing for them to expand more by having a great marketing plan.
 Competitive situation
Since portable consumer electronic goods have become more popular, many companies
started to make wearable products, such as Apple Watch, Nike+ FuelBand, Microsoft
band, Garmin, Jawbone, Moov, Misfit, and so on. However, Fitbit still has the biggest
market share in the wearable electronic market. Prospero (2014) mentioned that Fitbit
gained 3 percent of the market share last April. Additionally, Nike for Nike+ FuelBand is
going to focus on software more than hardware devices. Because the company did not
earn enough profit from its product. Therefore, Fitbit should stand its position in the
market and also keep improving or innovating all the products. For Fitbit Inc., there are
lots of competitors in the wearable electronic market, but since Fitbit has its strong

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market position, competitors are not the biggest threat for them. The article “One Third of
Wearable Device Wearers Ditching Them” (2014) says that 33% of consumers who
owned wearable electronic devices in the U.S. stopped using the product 6 month after
purchasing. It means that wearable products do not fully satisfy every customer.
Therefore, Fitbit should have a marketing plan which can promote the products, acquire
more customers, and also remind every consumer that the health electronic device is
better for long-term use.
 Target group analysis
This direct marketing plan we aim at women whose age are around 25 to 35 and have
health conscious. According to Nielson (2014), 54% of women have owned fitness
bands, and 40% of them are in age 25 to 34. Also, 34% of people have income from 55k
to 99k a year. In other words, this target market will be the best target market for Fitbit to
explore for their products. The article “This Year’s Top New Year’s Resolution?
FITNESS!!” (Nielson, 2015a) shows that staying fit and healthy is the top new year’s
resolution. It is at 37% from the survey that they have made. The second resolution is
losing weight, and it is around 32%. It means that the marketing plan might focus on
those reasons to make people interested in the products from Fitbit. The other report from
Nielsen (2015b) states that more than half of women in the world think that they are
overweight, and 56% of women are trying to lose weight. Additionally, when think about
losing weight, women usually decide to diet rather than do physical exercise. To compare
men and women on the habit of health, around 77% of men like to do exercise and
women is 9% fewer than men. Even though men do exercise more than women, 68% is a
high number for women overall. Therefore, Fibit can focus on their product’s feature to
encourage women to track their health long-term with Fitbit’s products.
 Distribution channels
Fitbit’s distribution channels included both online and offline store. Products are sold in
over 45,000 stores and in more than 50 countries. In addition to fitbit.com, trackers can
be purchased in stores or online from the following stores:

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Amazon At&t Best buy Brookstone
Dick’s Sporting
Goods
Kohl’s Radioshack REI
Sports Authority Target Verizon Walmart
The above distribution channels do not fit in our direct marketing campaign. All of our
“call-to-actions” lead to a landing page on fitbit.com
 Current product situation
Fitness wearables are gaining more popularity. Fitness trackers market grew over 150%
as around 7 million units were bought and shipped during the first quarter of 2015
(Charara 2015). Fitbit brand positioning is very good and the company has a leading
market position. According to The NPD Group, Fitbit trackers were the highest fitness
trackers sold in the U.S. in 2014. Share of The U.S. fitness activity trackers is 68%.
In today’s world, brands are on a race to push content digitally and interact with
consumers on multiple social media channels. Therefore, it is important to understand
how consumers perceive Fitbit based on their interactions with the brand on social media
channels. We used Rival IQ[1] tool to measure the social presence of Fitbit against its
main competitors – Garmin, Jawbone, Misfit Wearables, and Moov, Fitbit has the highest
number of social audience (Figure 1) and is the leader of Total Social engagement
(Figure 2). However, Garmin has the highest number of social activity (Figure 3).
[1] Digital marketing analytics tool with competitive analysis. Social media analytics, SEO keyword rankings
and Website content marketing

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Figure 1 - Social Audience Comparison of Fitbit
Figure 2 - Social Engagement Comparison of Fitbit

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Figure 3 - Social Activity Comparison for Fitbit
 Prices:
Fitbit’s trackers range from $59.95 up to $249.95.
 Sales:
Fitbit is enjoying significant sales growth. According to the company’s SEC filings[2], the
company announced revenue of $745.4 million with a net income of $131.8. The number
of devices that Fitbit sold in 2014 was 10.9 million which is 142% increase than the
previous year which number of devices sold were 4.5 million (Figure 4) (Fitbit 2015)
[2] “An SEC filing is a financial statement or other formal document submitted to the U.S. Securities and
Exchange Commission (SEC). Public companies, certain insiders, and broker-dealers are required to make
regular SEC filings.” Wikipedia

9. 9
Figure 4
C. Opportunity and Issue Analysis
 Strengths
Market leader:
Fitbit announced that it owned 70% market share in the fitness tracker industry, which
shows high level of awareness, reputation and credibility for the brand. Fitbit can take
advantage of that and launch direct marketing campaign and emphasize its popularity.
Partnership with wellness/ fitness organization:
Partnership with this organization increases the brand’s credibility. Also, referring to the
organization in the direct marketing campaign, the advertisements are more credible and
convincing.
Reasonable pricing:
Compared with other competitors, Fitbit products have a competitive advantage because
it offers lower prices of similar products while maintaining high quality. Price is one of
the most important factors while making purchasing decision. Therefore, emphasizing
price and value of Fitbit products in the direct marketing campaign, as well as
recommending different products to different target markets can be a good strategy.
Various Models:
Fitbit offers various device models, which enable the customers to choose the one that
match their needs. Also, each model has its special features for example: some models
come with LED screens and some others are capable of tracking sleep quality.

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Sleeping monitor:
Fitbit stands out from other similar trackers because, unlike other trackers, it monitors
sleep quality. This is attractive to customers that have issue with sleep.
 Weaknesses
Lack of credibility of data:
Fitbit has its own way of calculating the calories burned, number of steps, the distance,
etc. Therefore, the data it collects might not be as accurate and reliable as data collected
from medical devices.
 Opportunities
Healthier lifestyle trend:
Nowadays, more and more people are concerned about their health status. Therefore,
Fitbit can encourage people to get their own trackers by promoting healthier lifestyles
and helping them learn more about their bodies based on the data generated by the
trackers.
Social connection:
With the increasing popularity of using different social media channels, Fitbit can
encourage users to share their daily activity log on social media channels. This feature is
already included in the trackers’ software. This is an excellent opportunity that Fitbit can
use while promoting its products.
Medicine Platform:
Even though the data collected from Fitbit devices is not as accurate as the data collected
from professional medical facilities, it can still be helpful for users. Basically, the users
can monitor their bodies’ activity daily. Probably in the future, Fitbit database can be
used in the medical field especially that Fitbit has already established partnerships with
fitness organizations.
 Threats
New technology/ competitors:

11. 11
The coming technology and new products threaten Fitbit market share. For example, the
designs of Nike Fuelband are appealing to customers. In addition, other brands are
gaining awareness quickly.
D. Goals & Objectives
 Demand generation covers all targeted marketing activities that create awareness towards
our products, our company, content, and industry. Demand Generation includes a mix of
inbound and outbound strategies. It allows us to reach new markets, promote new
products and content, build consumer buzz, seek new customers, and re-engage and
retarget existing customers and engaged visitors. Direct Marketing is more than just
targeting users at the top of the funnel - it’s touching users throughout the conversion
optimization and sales cycles.
Background: Fitbit bleeds a strong brand in the industry, but is limited on how it creates
awareness and buzz for the female demographic. It’s a mixture of limited product reach,
educating organic and paid traffic, minimal impact in creating awareness and targeting profiles
and segments, and minimal efforts in boosting impact in the industry through created content and
PR.
Primary business objective: Increase the amount of ______ purchases by _____% in Q4 from Q3.
Secondary business objectives: Increase foot traffic to the site and landing pages by 10% by Q4.
Vision: After various tests and methodologies in Q3, have all selected marketing campaigns
optimized in driving traffic and conversions to Fitbit in Q4.
E. Marketing Strategy
 Increase Demand and Leads Beyond Organic Reach:
Through a variety of PPC and internal campaigns, direct marketing, SEM, nurturing
campaigns, retargeting, and co-marketing partnerships, Fitbit will promote and drive
demand from specific points of the funnel.

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 Promote Fitbit with Online Targeted Campaigns:
By utilizing various PPC channels, Fitbit will target profiles based off of keywords,
database, behavior, segmentation, and traits.
 Promote Fitbit through Direct Mail:
By utilizing _______, Fitbit will target profiles based off of database traits (email,
geographic, age, etc).
 Retarget Non-Converted Web Visitors:
For website visitors (and captured leads) that are engaging with our online portal, but not
yet converting, retargeting allows us run advertisements through web and social to
educate and promote our services to entice those visitors to convert.
F. Direct Marketing Tactics
 Channels & Key Tactics:
a. SEM: When people search for a product, service, or information, they will utilize
search to obtain the necessary content. SEM allows us to promote websites to
receive maximum exposure that organic links wouldn’t be able to do otherwise.
SEM is split into two networks: Search and Display.
i. Search: Utilized to target branded and non-branded keywords, but
primarily focusing on the female demographic and female type search
terms. Ads appear in order dependent on bids and quality scores. On
average, search will receive approximately ______ impression per month.
AdWords will be optimized on a consistent basis to improve CTR, CPA,
and impressions and to reach and test new keywords. A group of
keywords to target would involve exercises for women, women’s fitness
wear, women’s health, workouts for women, women’s fitness clubs,
women’s muscle, etc.
Forecast
Budget Impressions/month CTR Clicks Conv% Purchases CPA
$10,000 700,000 0.4% 2,800 3% 84 $83.33

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ii. Display: Is utilized to run advertisements on websites through targeting
interests and topics. Display will be optimized on a consistent basis to
improve CTR, CPA, and impressions. Entering a few ideal keywords
regarding what our target is interested in, we can run display ads on
specific websites, such fitnessmagazine.com and freshworkouts.com by
excluding males and age groups.
Forecast
Spend Impressions CTR Clicks Conv% Purchases CPA
$10,000 4,000,000 0.1% 4,000 3% 120 $83.33

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b. Digital Advertising: To drive awareness outside of Fitbit’s organic reach,
advertising allows us to leverage and promote our brand by placing
advertisements on websites that are targeting specific profiles and behaviors.
Various platforms will be utilized throughout the year to drive interest and
awareness. Through testing a variety of these campaigns, the goal is to utilize a
couple of these channels to not only drive interest, but those that bring in strong
conversions and ROI.
i. PPC Advertising:
1. Contextual Advertising: Showing ads that are contextually relevant to
the context of the page that the prospect is on. System scans specific
keywords in an article or website, and returns advertisements that
appear on that specific article or website. Contextual advertising is a
form of targeted advertising in which the content of an ad is in direct
correlation to the content of the web page the user is viewing. As of
August, a $25k budgeted campaign is being invested into Xaxis
contextual advertising network through a 3-month window.

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Forecast
Impressions CTR Clicks Conv% Purchases CPA
9,090,909 0.1% 9,091 3% 136 $91.91
Impressions/Click Details
Publisher Methodology Objective Start
Date
End Date Rate
Type
Rate Quantity Budget
Contextual/
Keyword
Targeting
Posses greater
control of
brand
association by
dictating what
content you
surround
8/01/15 11/30/15 CPM $2.75 9,090,909 $12,500
2. Look-a-Like Advertising: Finding people who behave the same way
as your web visitors or customers, but who have not purchased your
product just yet. How does that work? Anonymously matching
prospects' cookies against the data-based characteristics of your web
visitors or customers. Classification could be across a range of
factors, including browsing activities, search activities, and datasets.
What emerges are ads that are served up to those prospects, delivering
customers that are similar and relevant to the current customer-base.
As of August, a $25k budgeted campaign is being invested into
Quantcast.
Forecast
Impressions CTR Clicks Trial Conv% Purchases CPA
7,462,686 0.12% 8,955 3% 134 $93.28

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Impressions/Click Details
Publisher Methodology Objective Start
Date
End
Date
Rate
Type
Rate Quantity Budget
Look-a-Like
Modelling
Locating new
consumers
that exhibit
the same
behavior as
existing
Fitbit’s
female
customers
and visitors
6/15/15 7/31/15 CPM $3.35 7,462,686 $12,500
c. Social: Utilizing the available information per network, this will allow Fitbit to
target profiles or groups to communicate and generate interest towards our
product.
i. Twitter: Reaching and advertising twitter users to help build awareness.
Targeting can be based off of keywords, interests, followers, and
demographics. For this specific campaign, Fitbit will initially devote $10k
for targeting specific users that have similar interests to fitness related
accounts. Specific location will be limited to United States with only
targeting females. With bid of $3.25 per click, the estimated reach is 974k
out of 3 million. Total potential reach is 3 million.
Forecast
Budget users/month CPC Clicks Conv% Purchases CPA
$10,000 974,000 $3.25 3,077 1% 31 $322

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ii. Facebook: Advertising to specific profiles to help build interest for
specific campaigns. Targeting can be based off of numerous traits: age,
gender, demographic, job titles, likes, interests, etc. For this specific
Facebook campaign, Fitbit will also devote $10k for targeting users with
specific interests. Specific location will be limited to United States with
only targeting females. With bid of $0.75 per click, daily budget of
$1,000, the estimated reach is 150,00 - 400,000 users per day. Total
potential reach is 4.7 million.
Forecast
Budget users/month CPC Clicks Conv% Purchases CPA
$10,000 250,000 $0.75 13,333 1% 133 $75.19

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d. Retargeting: For web visitors that don’t convert in purchasing online, Fitbit will
retarget those visitors through web and social advertisements. The campaign is to
recapture and eventually convert those visitors by enticing them through
educational content. Some content are as follows:
i. Landing page with user submitted videos showing the benefits of Fitbit
ii. Landing page with health professional testimonials bringing to light the
health benefits of Fitbit.
Estimating the non-converted traffic through the campaigns we’ll be running and
the overall foot traffic Fitbit generates, we have the potential to retarget 1,000,000
visitors.

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Forecast
Budget Impressions/month CPM CTR Clicks Conv% Purchases CPA
$20,000 8,583,690 $2.33 0.4% 34,335 1% 343 $58.31
e. Direct Mail:
i. House list: Choose women from the house lists made by registering people
at various events. there are the people who have already shown some
interest in Fitbit. The only cost involved will be printing, creative and
posting as the lists are generated in house. The mail quantity will be 4000
and these will be sent out before the beginning of spring.

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Particulars Cost
Creative $300
Printing $150 CPM
Postage 25 cents per piece
Total cost $300 + ($150/1000*4000 + $.25*4000) =
$1900
Media Quantity Frequency Impressions Total
cost
CPM Response
rate
Orders CPA
DM 4000 1 4000 1900 550 .020 80 27.50
ii. External lists: Buy lists from events such as Bay to Breakers run or Color
run which are attended by huge number of women. There are thousands of
people who register for these events and their information is accessible.
Also, these are the people who can be Fitbit's primary target as they are

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health conscious and it will be easier to convince them to track their
activity. Buy lists with addresses, name, zip code and gender. Send out
direct mails to them and track the response by adding a code to the mail.
The below ad will be mailed to the external lists and will be sent out to
10,000 women from the database. Here, we are targeting women who are
not just health conscious but are socially active and like to go out with
friends and have fun.
Particulars Cost
Base rate for list $85/M
Additional cost (Address, zip code,
gender, name)
$ 20/M
Login: fitbitmybff.com to BUY NOW and get 5% off a
new Fitbit charge
Hurry!! Limited time offer. Login and enter FIT2HEALTH
code

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Total $105/M
Creative $300
Postage 25 cents per piece
Printing $150 CPM
Total cost $300 + ($105+$.25*1000+150)/1000*20,000
$10400
Media Quantity Frequency Impressions Total
cost
CPM Response
rate
Orders CPA
DM 20000 1 20000 1040
0
.535 .020 400 26.75
f. Email: Tie up with top five runs across the United States and this generates a
database of more than 300,000 people who are either health conscious or socially
active and spend a lot of time in activities with friends and family. Apart from
these runs, there are marathons in every city in The U.S. and we will gather a
database of 300,000 women through these five runs and other marathons’
database.
The following is the list of the runs and number of participants according to the data
available.
Run Location Participants in previous years
Bay to breakers San Francisco 110000
Lilac bloomsday Washington 61298
Peachtree road race Georgia 58000
Bolder boulder Colorado 54040
NYC marathon NYC 50740
Total 334078

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The emails will be sent out to them before the event starts and it will remind them to track
their activity level and how to be prepared for the run.
Particulars Cost
Number of emails : 300,000 $85/M
List CPM $ 73.67/M
Email blast $ 200
Creative $300
Total cost $300*9 + $200*9 + ($ 73.67)/1000*150,000
$26,600

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Media Quantity Frequency Impressions Total
cost
CPM Response
rate
Orders CPA
Email 30,000 5 150,000 26,600 .09 .002 600 45.1
7
 Total budget and CPA:
Budget Impressions/month Purchases CPA
Search 10,000.00 700,000.00 120.00 83.33
Display 10,000.00 4,000,000.00 120.00 83.33
Contextual 12,500.00 9,090,909.00 136.00 91.91
Lookalike 12,500.00 7,462,686.00 134.00 93.28
Facebook 10,000.00 250,000.00 133.00 75.19
Retargeting 20,000.00 8,583,690.00 343.00 58.31
DM 1,900.00 2,000.00 80.00 23.75
DM 10,400.00 10,000.00 400.00 26.00
Email 26,600.00 150,000.00 600.00 44.33
Total 113,900.00 30,249,285.00 2066.00 44.48
 Key assets & tools to support the project:
a. Kissmetrics
b. Google Analytics
c. Paid Dashboard (AdRoll, Adwords, Quantcast, Xaxis, [direct mail], etc)
d. SFDC (opportunity reporting)
e. Pardot List Building
G. Database Development
The following reports will be run weekly and shared with the team to give insight into what’s
working and what’s not.
 Traffic Impressions: How is the traffic being develop on various channels
 List of generated leads through unique landing pages: count of leads to see which
campaign is working more successfully than others
 Trial conversions (entire funnel) through UTM parameters

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 CPA: for all the campaigns
 Conversion rates or impressions to clicks to purchases: for tracking different channels
 Growth percentage from paid and organic activities (nurturing)
 ROI monitoring: to check the profitability across channels and campaigns
 Response rates of Direct mail: this will be followed by a test, once sure which one works
better , will be launched on a full scale.
 CTR of emails
 Which creative is generating more sales
 Time of year and time of month and the day when the responses are higher: to see
seasonality of time of day when responses are higher.
H. Implementation Timetable of the Program
The goal of this direct marketing campaign is to increase the sales volume and foot traffic to
Fitbit’s official website and landing pages. In order to increase the number in Q4, we plan to
execute the campaign from March 2015 until the end of the year. The offers that we send are
going to tie up with relevant holiday seasons and relevant events. It will go through multiple
channels, such as Email, direct mail, social media, Google AdWords, and few other online
advertising tools.
Implementation timetable of plan
Channel/ Time Mar. Apr. May. Jun. Jul. Aug. Sept. Oct. Nov. Dec.
Email         
Direct Mail  
Facebook 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%
Twitter 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%
AdWords
(SEM)
10% 10% 10% 10% 10% 10% 10% 10% 10% 10%
XAXIS
(Contextual/
Keyword
Targeting)
  

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Quantcast
(look-a-like)
  
I. Budgets and Financial Information
Assumptions Campaign P&L
Unit price 123.5 Orders 2066
Shipping 5 Gross sales ($) 265481
Mail quantity 324,000 Returns ($) 7964.43
Response rate 0.014 Net sales ($) 257516.6
Return rate 3
Average order size 1
COGS ($) 72310
Variable costs Fulfillment ($) 7725.497
COGS 28% Bad debt ($) 5150.331
Fulfillment 3% Total Variable cost ($) 85185.83
Bad debt 2%
Total 33% Total marketing cost ($) 113900
Overhead ($) 1000
Fixed costs Total fixed cost ($) 114900
Overhead 1,000
Profit / Loss ($) 57430.74
*We have not included Twitter as that will just be run on a trial basis and we continue only if we
see initial success.

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Assumptions Campaign Customer Lifetime value
Unit price 123.5 Response rate 0.0 10.0 20.0
Shipping 5 Orders 2066.0 185.9 353.3
Mail quantity 324,000 Starting customers 2066.0 1859.4 1766.4
Response rate 0.014 Retention rate 0.8 0.9 1.0
Return rate 3 Gross sales ($) 265481.0 238932.9 226986.3
Average order
size 1 Returns ($) 7964.4 7168.0 6809.6
Net sales ($) 257516.6 231764.9 220176.7
Variable costs
COGS 28% COGS ($) 72310 65079.0 61825.1
Fulfillment 3% Fulfillment ($) 7725.5 6952.9 6605.3
Bad debt 2% Bad debt ($) 5150.3 4635.3 4403.5
Total 33% Total Variable cost ($) 85185.8 76667.2 72833.9
Fixed costs
Total marketing cost
($) 113900 113900 113900
Overhead 1,000 Overhead ($) 1000 1000 1000
Total fixed cost ($) 114900 114900 114900
Profit / Loss ($) 57430.7 40197.7 32442.8
Discount rate 1.0 1.1 1.2
Net present value ($) 57430.7 40197.7 32442.8
Cumulative NPV ($) 57430.7 97628.4 130071.2
Customer Lifetime
value 27.8 47.3 63.0

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J. Evaluation Rules and Methods
 To evaluate this plan, we will track the increase in sales during this period for the Fitbit
Charge collection. We will count new purchase that happen while the direct marketing
campaign is running.
 Also, we will check the click through rate of our various channels and put them against
the purchases made to see the actual conversion.
 At the end, the plan has to be profitable throughout the channels. We will continuously
record the profitability of the channels and campaigns to see where to add investment and
where to reduce it.
 We also look forward to people engaging with our app, so we wish to see more activity
level on the app as that will be somehow be translated as engagement.
 If we see that people who own lower models and used the codes to upgrade to a higher
version, that will be an added achievement too and will be measured separately.

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K. Reference
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